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Is Mirati Therapeutics, Inc.'s (NASDAQ:MRTX) CEO Pay Fair?

Simply Wall St

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Charles Baum has been the CEO of Mirati Therapeutics, Inc. (NASDAQ:MRTX) since 2012. This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. After that, we will consider the growth in the business. And finally - as a second measure of performance - we will look at the returns shareholders have received over the last few years. This process should give us an idea about how appropriately the CEO is paid.

View our latest analysis for Mirati Therapeutics

How Does Charles Baum's Compensation Compare With Similar Sized Companies?

At the time of writing our data says that Mirati Therapeutics, Inc. has a market cap of US$4.0b, and is paying total annual CEO compensation of US$4.9m. (This number is for the twelve months until December 2018). We think total compensation is more important but we note that the CEO salary is lower, at US$580k. We looked at a group of companies with market capitalizations from US$2.0b to US$6.4b, and the median CEO total compensation was US$5.2m.

That means Charles Baum receives fairly typical remuneration for the CEO of a company that size. Although this fact alone doesn't tell us a great deal, it becomes more relevant when considered against the business performance.

You can see, below, how CEO compensation at Mirati Therapeutics has changed over time.

NasdaqGS:MRTX CEO Compensation, July 18th 2019

Is Mirati Therapeutics, Inc. Growing?

On average over the last three years, Mirati Therapeutics, Inc. has grown earnings per share (EPS) by 12% each year (using a line of best fit). Its revenue is down -50% over last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. Revenue growth is a real positive for growth, but ultimately profits are more important. You might want to check this free visual report on analyst forecasts for future earnings.

Has Mirati Therapeutics, Inc. Been A Good Investment?

Boasting a total shareholder return of 1929% over three years, Mirati Therapeutics, Inc. has done well by shareholders. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary...

Remuneration for Charles Baum is close enough to the median pay for a CEO of a similar sized company .

The company is growing earnings per share and total shareholder returns have been pleasing. Indeed, many might consider the pay rather modest, given the solid company performance! Shareholders may want to check for free if Mirati Therapeutics insiders are buying or selling shares.

Arguably, business quality is much more important than CEO compensation levels. So check out this free list of interesting companies, that have HIGH return on equity and low debt.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.